Emergency fund

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An emergency fund is a highly liquid source of cash intended to deal with "emergencies". The emergency fund does not necessarily need to be a separate fund. If an appropriate amount of your portfolio is in investments that can be liquidated quickly (such as a money market account, CDs or I bonds) then those investments can double as the emergency fund.

A portion of the emergency fund should be kept on hand in actual cash. This is useful during community-wide emergencies (power outages, weather-related issues, natural disasters) that might interrupt access to bank accounts.

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